8th Jan 2020 10:22
(Alliance News) - Shares in China New Energy Ltd slumped on Wednesday, after the company said its Hong Kong listing is taking longer than anticipated and added that it will once again seek shareholder permission to delist from London's AIM market.
China New Energy provides technology to producers of ethanol and other bio fuels.
The stock was 14% lower at 2.50 pence in London on Wednesday morning.
Although "good progress" is being made on its listing on the Hong Kong Stock Exchange, the application process "has taken longer than expected".
China New Energy added that it will need to secure shareholder permission again if it is to delist from AIM. In October, the firm secured consent from its shareholders to pursue a Hong Kong listing and the cancellation of the trading of its shares on AIM.
However, the permission expires on January 22 and the company said it will call an extraordinary general meeting to hold another vote.
Admission to trading on the Hong Kong bourse is expected to occur in the first half of 2020.
Turning to its trading, China New Energy said its second half performance in 2019 "remained strong", and added that it is optimistic about its prospects in 2020.
Chair Weijun Yu said: "We are very pleased with the financial performance of the company in 2019 and the current order book gives us confidence to maintain or better our current financial performance in the year ahead. It remains our primary objective to have the company's shares admitted to the Main Board of the HKEx in the first half of 2020. We remain confident that the HKEx listing will both improve shareholder value and provide us access to cost-effective capital to develop our business to its full potential.
A convertible loan agreement with Double River Ltd, secured in February 2019, has been extended until May 14, 2020.
The agreement was due to mature on February 14.
The terms of the agreement are unchanged, China New Energy said.
As part of the deal, Double River would provide China New Energy with HKD11.5 million, roughly GBP1.1 million, which will be automatically converted into ordinary shares of China New Energy at a price of HKD0.481 per share.
In the event that it is not converted, the loan carries an interest at a rate of 12% per annum. If the loan is converted, no interest will be applied, China New Energy said last February.
By Eric Cunha; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
CNEL.L